Platform progress opens the door for CNS dealmaking

While the unmet need for new therapies for many central nervous system (CNS) disorders is huge, the complexity of the brain, combined with our limited understanding of the ways in which brain functions can go awry, make developing drugs for such disorders exceptionally challenging. Indeed, for some disorders such as Alzheimer’s disease, vast amounts of money have been invested in the late-stage clinical development of potential drugs over the past decade, with nothing but failure to report so far.

Nevertheless, companies and investors have persisted, encouraged not only by potentially large markets for successful therapies, but also by the emergence of novel therapeutic modalities that can help harness new biological and clinical insights, such as RNA interference (RNAi) and gene therapy based on adeno-associated virus (AAV) vectors. These approaches are fuelling licensing deals and investments, particularly for neurodegenerative diseases, such as Parkinson’s disease and spinal muscular atrophy (Tables 1,2).

For example, Regeneron Pharmaceuticals recently established a multicandidate alliance with RNAi pioneer Alnylam Pharmaceuticals, involving an initial outlay of $800 million in cash by Regeneron plus up to $200 million in near-term milestones (Table 1). Although the collaboration is not solely focused on CNS conditions, they are a core component of the ten-year pact. The alliance marries a novel therapeutic modality—Alnylam’s maturing RNAi platform—with Regeneron’s target discovery capabilities, which are underpinned by its longstanding experience in mouse genetics and more recent deep dive into human population genetics.

Jefferies analyst Maury Raycroft heralded the deal as a win-win. “We believe the combo could offer an interesting blend of technologies and know-how,” he wrote in a research note. A key enabler was Regeneron’s demonstration last year of the successful delivery of ligand-conjugated small interfering RNA molecules to the CNS of rats by injection into the cerebrospinal fluid.

Breaking through with regenerative medicine

Delivering a therapeutic agent into the brain is typically a necessary, but often challenging, step in any CNS-focused therapeutic development program. Regenerative medicine approaches—based on gene therapy, cell therapy and small molecules—are now providing developers with routes into some CNS diseases. For example, the maturation of CNS-targeted gene therapy vectors, which can be administered by intravenous or intrathecal injection, has been an important technological enabler for a spate of deals.

AveXis is a key exemplar. The highly promising clinical data (N. Engl. J. Med. 377 , 1713–1722; 2017) it generated with Zolgensma (onasemnogene abeparvovec; AVXS-101), an intravenously delivered AAV9-based gene therapy for spinal muscular atrophy (SMA), prompted an $8.7 billion buyout from Novartis last year. The therapy has since been submitted to the US Food and Drug Administration (FDA) for regulatory approval, with a decision expected soon after the time of writing. If approved, the treatment will be the first gene therapy approved for a CNS disorder.

Other firms are following in its wake, including Voyager Therapeutics, which has also focused on using AAV vectors for neurodegenerative disorders. In January, the company signed a deal potentially worth $1.8 billion with Neurocrine Biosciences for four of Voyager’s gene therapy programs, including VY-AADC, a phase 2 candidate for Parkinson’s disease (Table 1). Less than a month later, Voyager teamed up on another Parkinson’s disease deal—this time with AbbVie. The deal, which could be worth more than $1.5 billion, will see the companies collaborate on the development of AAV capsids encoding antibodies that target pathological species of α-synuclein in Parkinson’s disease.

The promise of gene therapy is also leading to the establishment of new companies in the space, including Passage Bio, a startup cofounded by gene therapy pioneer James Wilson, of the University of Pennsylvania. Following a $116 million series A financing round in February, the company is taking forward five next-generation AAV-based therapies for rare monogenic CNS disorders. Its lead programs include GM1 gangliosidosis, a rare lysosomal storage disorder caused by a lack of β-galactosidase, and a genetically inherited form of frontotemporal dementia, caused by loss-of-function mutations in the gene encoding progranulin, a growth factor that supports neuronal survival and suppresses neural inflammation.

“I think gene therapy has proven itself as a modality that allows you access to the CNS in new and impactful ways,” said Tom Woiwode, a managing director at Versant, one of the series A investors in Passage Bio. Rare genetic diseases are in vogue both because they can generally be replicated in preclinical animal models and because objective endpoints can be readily defined for clinical trials.

“Beyond that, it’s more complicated,” said Versant managing director Jerel Davis. There has, he said, been some success in genetically defining small groups of patients in certain complex CNS indications, such as Parkinson’s disease and amyotrophic lateral sclerosis (ALS), and these insights are now being tested in drug development programs.

For example, Denali Therapeutics has won industry and investor backing for its CNS drug development strategy, which is based on the biomarker-guided clinical development of drugs that address novel, genetically validated targets and can cross the blood–brain barrier. Its lead programs include a small-molecule inhibitor of leucine-rich repeat kinase 2, in development for Parkinson’s disease—the target is the most common genetic risk factor for the condition—and an inhibitor of receptor-interacting serine/threonine protein kinase 1, a master regulator of inflammation and necrosis (a form of programmed cell death), in development for Alzheimer’s disease, ALS and multiple sclerosis.

Alzheimer’s disease targets shoot blank

But genetic insights into disease biology are no guarantee of clinical success. Despite extensive genetic evidence linking Alzheimer’s disease to amyloid-β (Aβ) accumulation, numerous attempts to target the process with either Aβ-directed antibodies or small-molecule inhibitors of β-site amyloid precursor protein cleaving enzyme have floundered. This year looks like a turning point in the evolution of drug development in Alzheimer’s disease, as two more antibodies targeting the Aβ cascade failed phase 3 trials.

Roche’s decision to discontinue development of crenezumab, which it licensed from AC Immune, was swiftly followed by Biogen’s termination of aducanumab, which it had licensed from Neurimmune and was developing in partnership with Eisai. “Obviously it was a big shock for us,” said AC Immune CEO Andrea Pfeifer. The company had raised enough cash to fund the rest of its pipeline, which includes antibodies, small molecules and cancer vaccines directed against tau, another key player in Alzheimer’s pathology. But its staff had high expectations for crenezumab. “The company was prepared for the event. Psychologically, emotionally, we were not,” she said.

The setback raises anew the same question that has always dogged Alzheimer’s disease drug development—who to treat and when? “We are selecting patients based on MMSE [mini-mental state examination] scores,” Pfeifer said. “Is that good enough to select a patient population that is quite heterogeneous?” Future trials will require more rigorous selection criteria—but further research is needed to refine what they might be. “I think we should work together in certain areas, such as biomarkers, to move the field forward,” said Pfeifer. There is, she said, a “generational responsibility” to continue investment in Alzheimer’s disease research.

For Angus Grant, CEO of the Dementia Discovery Fund (DDF), a mission-oriented venture capital firm backing new approaches to treating all forms of dementia, “the current failures are a call to arms.” Launched in 2015, the DDF completed its fundraising in June 2018, with a final close of £250 million ($350 million). Its backers include the UK Department of Health, Alzheimer’s Research UK, the Bill & Melinda Gates Foundation, the American Association of Retired Persons and a biopharma industry consortium. DDF has quickly built a large portfolio of biotech firms and is also backing earlier-stage research projects that need additional validation before they can form the basis of commercial drug development programs.

The key to making progress, it holds, is a better understanding of which patients should—and should not—be included in a trial. “If that is not addressed I think you lose a lot of signal to noise,” said DDF chief strategy officer Barbara Tate. “We absolutely believe it is part of the solution ” One of the fund’s earliest investments, Alector, exemplifies this approach, employing genetic screening and proprietary biomarkers in its inflammation-focused Alzheimer’s disease programs. Alector raised $176 million in its initial public offering in February this year (Table 2), and is now in early clinical development with AL002, an antibody that activates triggering receptor expressed on myeloid cells 2 (TREM2), a signaling protein required for microglial activity. Loss-of-function mutations in the TREM2 gene are associated with an increased risk of Alzheimer’s. Also in the clinic is AL003, an antibody-based inhibitor of sialic acid-binding Ig-like lectin 3 (SIGLEC-3), a receptor with an inhibitory effect on microglial function. Carriers of genetic variants with reduced SIGLEC-3 function have lower risk of late-onset Alzheimer’s disease.

These programs are early stage, but their initial readouts, like those of Denali, will be closely scrutinized, given what is at stake. And Grant declares himself to be “inherently optimistic,” pointing to the progress in recent decades that has transformed cancer care from a “carpet-bomb” treatment to a precision approach based on identifying and drugging the key pathways that influence an individual patient’s tumor.

Psychiatric disorders still underserved

While investment continues to pour into neurodegenerative disorders, there were no hot startups closing $100 million series A rounds to change the way we treat neuropsychiatric disorders, such as depression or schizophrenia. A 2018 study from BIO analysts David Thomas and Chad Wessel noted that just 29 of the 218 FDA approvals for depression since 1959 involved novel substances (The State of Innovation in Highly Prevalent Chronic Diseases. Volume I: Depression Therapeutics . (BIO, 2017))—the vast majority comprised either generics or new formulations of existing products. Scientific uncertainties, including a lack of reliable animal models, combined with challenging regulatory requirements, and a difficult commercial environment, all constitute barriers to innovation.

Nevertheless, the outlook is not completely gloomy. After decades without an FDA approval of an antidepressant with a novel mechanism of action, two received the green light in just one month. In March, the FDA approved Johnson and Johnson’s Spravato (esketamine)—an enantiomer of the analgesic and ‘party drug’ ketamine — for patients with treatment-resistant depression. And shortly after, the agency approved Zulresso (brexanolone), the first drug specifically developed for postnatal depression, which was pioneered by Sage Therapeutics. The company has several other compounds at earlier stages of development for depressive disorders.

“Sage really does stand out,” said Woiwode. “They’re tough indications, and they’ve done well there.” But the landscape remains wide open for further innovation in CNS disease.